Nvidia says AI chip sales strong despite DeepSeek fears

Nvidia, the artificial intelligence chip giant, stated that its business remains strong despite concerns about a bubble being triggered last month by the rise of Chinese AI company DP Technology. The market had previously been unsettled by news that DP Technology was using lower-cost chips to train its chatbots, but Nvidia remains confident in its market position.

In the three months ending January 27, Nvidia's chip sales exceeded $39 billion (£30.7 billion), a 74% year-on-year increase. Demand for Nvidia has surged as large tech companies flock to it, seeking chips capable of processing the massive amounts of data needed to train AI models, solidifying Nvidia's position as a key supplier.

The emergence of DP Technology had caused a significant drop in Nvidia's stock price earlier this month, sending shockwaves through the market. However, investor sentiment has eased after major companies like Meta, the parent company of Facebook, indicated they expect to continue with their current AI investment strategies, reassuring the market of continued demand.

Nvidia CEO Jensen Huang stated that he is not concerned about a sudden shift in demand. He believes that future software will be created by machine learning, which requires a different chip architecture than the "hand-coded" methods of the past. "We clearly know that software has fundamentally changed," he said, adding that the widespread application of AI is still in its "early stages," suggesting further growth potential.

Nvidia currently dominates the advanced chip market, making it central to the AI investment boom of companies like Microsoft. Its stock price has soared by over 400% in the past two years, pushing the company's market capitalization above $3 trillion. Nvidia has stated that it is focused on rapidly scaling up production of its latest chip, Blackwell, which is helping to drive the company's revenue surge, ensuring its continued market leadership.

Chief Financial Officer Colette Kress said that its AI data center business is strongest in the United States, but the company is also seeing demand growth in other parts of the world, noting investments in France and the European Union. She stated that in China, demand remains lower due to U.S. trade controls preventing the company from exporting certain chips, and that the company expects shipments to remain roughly at current levels, reflecting the impact of geopolitical factors.